In 1991, the Indian government dismantled the License Raj – a system of central controls that regulated market entry and production activity in the registered manufacturing sector. In the same year, the Indian government enacted far-reaching trade reforms which removed quantitative restrictions on capital goods imports and brought down import tariffs. Since the 1991 economic reforms, there has been strong industrial growth in India at an annual rate of 9 per cent. Not all Indian states have performed well since the dismantling of the License Raj. Factors affecting the large differences in industrial growth across Indian states in the post-reform period are examined.
IPPG Briefing Note January 2009, IPPG, Manchester, UK, 2 pp.